3 Simple and Effective Metrics of Digital Transformation

“The digital road to hell is paved with good intentions” seems to be a fitting description of many companies' approach towards digital transformation.

For excuses to delay digitalization projects, here are some:

• "Our customers don't buy over the internet."
• "Data analytics cannot be carried out for legal reasons."
• "Digitization costs too much time and money."
• "We already have a digitalization manager / a digital project."
• "We are already done with our digitalization."

Getting down to business with digitalization

For those who have left these excuses behind, here are three simple and effective metrics:

1. Customer click share (Customer Experience),
2. Degree of automation (Operational Excellence),
3. Digital share of new products/markets (Digital Innovation).

These metrics provide a good indication, where your own company stands in the journey of digital transformation:

1. Customer Click Share - Share of customer interactions in the web segment

• What's the proportion of customer interactions that are started, developed, deepened and improved through digital media across all channels?
• Customers are on the web and want to be well served digitally. Therefore, customer engagement strategies such as websites, online stores, integrated customer channels, personalized services, individualized data analyzes, online communities, social media interaction and platform solutions are "the place to be."
• Motto: "Customers who click with us, stick with us!"

2. Degree of automation of business processes

• What percentage of the processes and activities that can be automated have actually already been automated - in sales, in the office and in operations?
• Examples are customer relationship management, smart factory data integration, digital twins, robotic process automation, workflow automation.
• Motto: “Software eats the world! - Everything that can be digitized will be digitized. "

 3. Digital share of new products / new markets

• How much turnover in $ or in percent flows from new offerings / new markets with integrated digital elements, such as data, platform, artificial intelligence (AI), apps, reviews, etc., which are the reason for purchase decisions?
• Examples of this can be product configurators, integrated data in services, analysis data for higher machine efficiency, recommendation engines or attractive software interface.
• Motto: "We make money on the digital intelligence of our solutions!"

 Acting instead of talking, because time is running out

With these three simple metrics, management can get a first indication on how far the company has progressed in digital transformation. The three areas of concern are:

1) Customer Experience,

2) Process Optimization,

3) Business Model & Product Innovation.

Innovative products, novel sources of income, attractive customer experiences and strong operational excellence characterize the winners of the digital age.